Early growth

A business’s early growth stage is characterized by increasing sales and heightened complexity. The business is normally still focused on its initial product or service but is trying to increase its market share and might have related products in the works. The initial formation of policies and procedures takes place, and the process of running the business starts to consume more of the owner’s time and attention.

For a business to be successful in this stage, two things must take place. First, the owner of the business must start transitioning from his or her role as the hands-on-supervisor of every aspect of the business to a more managerial role. As articulated by Michael E. Gerber in his excellent book The E-Myth Revisited, the owner must start working “on the business” rather than “in the business.”^[1] The basic idea is that early in the life of the business, the owner is typically directly involved in building the product or delivering the service that the business provides. As the business moves into the early growth stage, the owner must let go of that role and spend more time learning how to manage and build the business. If the owner isn’t willing to make this transition or doesn’t know that it needs to be made, the business will never grow beyond the owner’s ability to directly supervise everything that takes place, and the business’s growth will eventually stall.